The 5 Major Components of Real Estate Wholesaling

Here is something I’ve been thinking about: how to simplify the explanation of wholesaling.

I’ve been speaking with a lot of people who have interest in what I do. I try to explain the concepts of real estate wholesaling, but it often goes over their heads. This include those who are interested in using this niche to help them get started in real estate. So for a brief moment while I have your attention, I’d like to dive into the major components of a wholesale transaction.

Before I start, I want to preface this by stating that these are just the five major components of wholesaling. Within each component, there are many smaller intricacies that need to be mastered.

So lets begin.

How to Invest in Real Estate While Working a Full-Time Job

Many investors think that they need to quit their job to get started in real estate. Not true! Many investors successfully build large portfolios over the years while enjoying the stability of their full-time job. If that’s something you are interested in, then this investor’s story of how he built a real estate business while keeping his 9-5 might be helpful.

The 5 Components of Wholesaling

1. Marketing

This is one of the most important components. Marketing is important because it’s the heartbeat that keeps your business going—or helps it get going. Simply put, without marketing, there are no leads. And without leads, there’s no business.

When I started, I hated marketing. It sucked for me because in order to market a product or a service, you have to have a budget. Well, in the beginning, most budgets for people who are just getting started is $0.00—and I was in the same position. Lucky for me, I’m an outside the box thinker. The main question I asked myself (I’m also a self-talker): How can I get noticed and find someone to bring me leads?

Thinking outside the box, I used the power of proximity. I would go to open houses hosted by realtors in my neighborhood and talk with the listing agents. I found this to be profitable. I found an agent who had a property that fell out of escrow, and the owner was distressed. Without delving into the deal, I was able to walk away with a $2,200 joint-venture deal (check in hand). What some people would pay $20,000 to learn from a course I learned in my first bird-dog deal.

You have to think outside the box to market to sellers, agents, and buyers. You have to utilize social media, direct mail, cold calling, newspaper, and any other marketing tool you think may be useful. However, the most important thing to do is measure to see which tool is successful for…

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Middle-class families are making less money in almost every U.S. state.
Median incomes have dropped nationwide since 1999, in some places by nearly 9 percent.
Still, according to a GOBankingRates study that identified "the best and worst states for the middle class," it's easier to get by in certain states than it is in others.
To be considered middle class, you have to earn an annual household income of "two-thirds to double the national median, after incomes have been adjusted for household size," according to Pew Research Center data.
Based on GOBankingRates' study, which considers changes in income versus the costs of big-ticket items like housing and college tuition, here are the five best states in the US for the middle class: Median middle-class income: $77,156 Median household income change of middle class: 1.7 percent In-state tuition and fees: $8,450 Median home list price: $229,500 Median middle-class income: $75,953 Median household income change of middle class: -3.8 percent In-state tuition and fees: $8,760 Median home list price: $181,900 Median middle-class income: $70,124 Median household income change of middle class: -6.7 percent In-state tuition and fees: $6,360 Median home list price: $290,000 Median middle-class income: $75,811 Median household income change of middle class: -0.6 percent In-state tuition and fees: $5,220 Median home list price: $249,900 Median middle-class income: $71,391 Median household income change of middle class: -6.5 percent In-state tuition and fees: $7,990 Median home list price: $180,000 GOBankingRates analyzed income trends, including the change in median household incomes of middle-class families from 1999 to 2014 and the change in the proportion of households earning a middle-class income, to determine where middle-class incomes stretch the furthest. "Although the middle class is shrinking," GOBankingRates reports, in some places "middle-income families continue to thrive."
In South Dakota and Vermont, middle-class incomes have increased by 1.7 percent and 0.2 percent, respectively.
The findings highlight that where you live matters: Median income and cost of living vary state to state.
Here are a few ways to get started.
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